FEATUREOne of the major obligations of productionoperators is to report any oil sheens that occurbecause a sheen is prima facie evidence thata reportable oil spill has occurred. 4 To thatend, the NPDES permit requires the operatorto minimize the discharge of dispersants,surfactants, anddetergents. This isnecessary becausethese substances tendto emulsify oil anddisguise the sheen,thus making detectionmore difficult. Inthis particular case,the produced waterwas so pollutedthat the cleaningprocess did not result in water that metCWA standards for discharge.

ABC Technologies contracted with
the platform operator to provide chemical
management services, and for a two-year period
sold chemicals to the operator and provided
associated consulting services on the platform.

Among the chemicals sold was Cleartron
ZB-103, which the foremen on the platform
requested despite ABC not recommending
its use. Employees of the platform operator
ordered more than 4,000 gallons of Cleartron
from ABC that was subsequently introduced
as a dispersant to hide oil sheens from the
produced water. ABC employees were aware of
how the production operators used Cleartron,
knew that such use was prohibited, and did
not report it to authorities. ABC employees
also inaccurately recorded the use of Cleartron
in reports, contributing to the regulatory
inspectors’ inability to detect its improper use
on routine inspections.

As a result of the plea deal, the companywas sentenced to a one-year probation, agreedto pay a $1 million criminal fine, and paidanother $250,000 to a community serviceprogram at a nearby estuary. The judgmentincluded many provisions that mirror acompliance agreement, and the EPA took thelead on the administrative resolutions, such asa debarment action or compliance agreement.

Note that thecompliance riskdeveloped out ofthe misconduct of the business partner. ABCTechnologies was not the one dumping waste,but they knew about it, profited from it, andtook steps to conceal it. Where profit is a motive,or individuals have a stake, either throughbonuses or performance reviews that tie tothese business relationships, there is going tobe the temptation to look the other way. Thequestion is, what are you doing to mitigate it?

The risks involved with dealing with third
parties should be part of your risk planning
and compliance training—and remember,
misprision will have you singing the blues. ✵

The opinions in this article are the authors and do not
necessarily represent the position of any government agency.